Foods power Unilever Nigeria’s profit growth as Personal Care sales slide

Unilever Nigeria has released its 9M unaudited financial statements, with its food business accounting for almost all its revenue growth in the first nine months of 2026, helping lift earnings despite weaker Personal Care sales.

Foods revenue increased 29.8% to N123.12 billion, contributing N28.23 billion of the company’s N28.60 billion increase in total sales; almost every additional naira of revenue came from Foods.

The performance helped Unilever grow pre-tax profit by 21.8% to N45.58 billion.

However, the third-quarter figures reveal an uneven business: While Foods continued to grow, both Personal Care and Beauty & Wellbeing recorded lower sales.

For shareholders, the question is whether Foods can sustain that momentum while management restores growth elsewhere.

Foods takes a bigger share of sales

Unilever’s Foods business, which comprises savoury products, generated N67 of every N100 in company revenue, compared with N61 a year earlier.

Its N123.12 billion in nine-month sales exceeded the combined N60.89 billion generated by Personal Care and Beauty & Wellbeing.

• Personal Care, which includes oral care and deodorants, recorded revenue of N42.37 billion, down 3.5% from N43.92 billion. Beauty & Wellbeing, comprising skincare products, grew 11.5% to N18.52 billion.
• Foods therefore did more than lead growth. It also offset the decline in Personal Care, allowing total revenue to increase 18.4% to N184.01 billion.

That strengthens the importance of Foods to Unilever’s earnings but also makes the performance of that category increasingly important to shareholders.

The third quarter reveals a wider gap

The difference between the businesses became more pronounced in the three months ended September.

• Foods revenue increased 27.2% to N46.06 billion.
• Personal Care sales fell 20.5% to N11.40 billion, while Beauty & Wellbeing declined 2.2% to N6.62 billion.
• Foods consequently accounted for almost 72% of quarterly revenue. Its N9.86 billion increase in sales more than covered the combined N3.09 billion decline in the other two categories.

Unilever still achieved overall quarterly revenue growth of 11.8%, but the result depended entirely on Foods overcoming weakness elsewhere.

The accounts do not explain how much of these movements came from prices, sales volumes, or changes in the products sold.

Foods’ growth helps lift margins

Unilever’s stronger sales also came with better margins. Revenue increased 18.4%, while the cost of sales rose just 7.8%, leaving N46 in gross profit from every N100 of sales, compared with N41 a year earlier.

• That improvement helped absorb higher marketing spending and other expenses. Operating profit increased 26.5% to N38.54 billion, while profit after tax rose 20.1% to N26.40 billion.
• Foods contributed N25.79 billion, or about 67%, of reported operating profit. Its importance therefore extends beyond sales: it is also Unilever’s largest reported source of operating earnings.

Across the company, higher operating profit accounted for about 99% of the increase in pre-tax earnings.

The improvement came overwhelmingly from the business itself, with little additional contribution from net finance income.

Resources to sustain growth and support weaker categories

The uneven sales performance puts management’s investment decisions in focus. Unilever needs to sustain Foods’ momentum while addressing the decline in Personal Care.

It has considerable financial room to do so. September’s cash balance of N91.34 billion far exceeded N2.38 billion in combined borrowings and lease obligations, giving management scope to invest without relying heavily on additional debt.

Spending on factories and equipment increased to N8.95 billion from N1.09 billion a year earlier.

The spending also needs to produce cash. Despite higher profits, operating cash after tax fell from N32.83 billion to N10.26 billion as tax payments increased, and more money became tied up in inventory and customer balances. Better cash generation would help fund further investment from current trading.

Does the valuation leave room for uneven growth?

At the October 23 closing price of N109, Unilever’s shares had gained 51.4% since the start of the year.

• Trailing twelve-month earnings of N6.37 per share put the stock at 17.1 times earnings. It also traded 6.04 times September’s book value.
• Those multiples alone do not establish whether the shares are expensive, but they make sustained earnings growth important.
• Foods is providing that growth today. A recovery in Personal Care would broaden the earnings base and reduce the pressure on Foods to carry the business.

For investors, the next test is whether Foods can maintain its momentum while investment helps the weaker categories recover.

Unilever has the resources; deploying them effectively to lift earnings per share and generate more cash will determine how well the business supports its valuation.